The owners at Pet Club are betting that more and more shoppers will want to feed their pets the same type of ingredients that they are consuming themselves and giving to their other family members.
Considering the Mesa, Ariz.-based company’s amazing growth over the last five years, it seems that this strategy is paying off big time. Despite being located in the backyard of one of the two giants in the retail pet industry and coming of age during one of the worst and most persistent recessions in generations, Pet Club has experienced dramatic growth in terms of store locations, sales and, according to many industry observers, profits. The chain now operates 31 stores in Arizona and Colorado under the Pet Club banner. In addition, the company, which was founded in 1982, owns a number of feed stores that are operated under different banners.
While the company may have had its start with feed stores, it is the Pet Club banner that is making the most noise in the southwest. Operating right under the noses of PetSmart executives, which is headquartered in nearby Phoenix, Pet Club has developed a niche in less than a decade by emphasizing a unique but broad selection of natural and holistic products in relatively small and convenient settings.
“We pride ourselves on carrying the largest selection of holistic and natural pet foods around,” says Weston Smith, the director of operations and one of the three partners at the privately owned company. “On top of that, we make sure that we feature the best selection of toys and treats in the industry. We have all the things that pet lovers want, and that translates into a loyal customer base and a growing business.”
For these reasons and more, Pet Club was selected as the 2012 Pet Business Retailer of the Year. The company and its top executives, including Smith and founder and CEO Tim Noland, will be honored by, along with many of the chain’s suppliers, at a dinner in Las Vegas this month.
It does not take long for an observer to see the difference between Pet Club and other pet stores, including the larger chains. The stores are perfectly maintained, and the assortment is focused on less than two-dozen key manufacturers, all producing natural or holistic products. At one 5,000-square-foot store in North Scottsdale, Ariz., for example, Natural Balance gets nearly three aisles of space for a whole range of food products, including grain-free items. Nature’s Variety, WellPet, Blue Buffalo, Orijen, Earthborn, Nutro, Iams, Canidae, World’s Best Cat Litter, Kong and Innova are among the other natural or holistic suppliers that also get substantial space in the plan-o-gram, with each company’s products normally grouped together by brand, as opposed to by product type.
“We want to make sure the flow of the store is good and customers can travel freely through the unit and see everything throughout the store, whether it’s food, toys or treats,” Smith says. “We put our premier brands at the perimeter of the store, so consumers have to travel down the aisle. Hopefully, it will get them to buy additional items.”
Also clear is the emphasis on dogs and cats, though Smith says that there are some products for birds, small animals and other pets available in most stores. The stores, which range in size from about 5,000 square feet to 10,000 square feet, each carry as many as 14,000 SKUs. “We have a wide range of products that fit the needs and price points for just about every consumer,” says Smith. “While we target the consumer seeking premium products, we make sure that we have a full line of merchandise for all shoppers.”
Pet Club is truly a recent phenomenon. While Noland started the company 30 years ago, the actual Pet Club retail brand was not introduced until about 10 years ago, when he opened a small retail area within a feed store. In fact, Smith says that Pet Club actually operated only seven stores as recently as 2007. That year, both Noland and Smith say, a well-publicized national pet food recall seemed to turn the retail pet world on its collective ear and encouraged consumers to seek new types of pet food, specifically natural and holistic options. It also got Pet Club off the ground.
“It really got going in 2007, when consumers started telling us they wanted more natural and holistic products because of a pet food recall that year,” Smith says. “We found that consumers started to change how they fed their pets. They wanted something better, and we saw an opening in the retail industry.”
Smith also joined the company that year, coming from The Iams Company, where he worked as a vendor for Noland. A third partner, Tim Stevenson, joined the company in 1990.
“Our view is that people who really care what their pets eat come to our stores,” says Stevenson. “Our product mix sets us apart from other players.
“We also fill a niche for those shoppers,” he adds. “We have the service, we have the products and we have the knowledge. Our job is to teach consumers what is going on in the marketplace and make it easier for them to shop for pet products.”
Noland says the company’s initial success with natural and holistic products allowed it to expand throughout Arizona and into Colorado. But he quickly adds that it was consumer demand for these items that fueled the growth.
“Shoppers obviously want these items,” he says. “Our job was to provide them with the proper education so they can make informed decisions on what food and supplements are best for their pets. So we make sure that our staff is knowledgeable about the products we stock.”
Adds Smith: “We know the situation here, in terms of competition. That is why customer service is so important to us. Teaching our shoppers about the product mix and what is right for them is also vital to our marketing plan. And, I must add, we get a tremendous amount of support from our vendors. I am amazed how willing they are to go into our individual stores and do their own training to our staffs.”
Creating the right mix is also important, and the executives stress that is largely a result of trial and error, as well as developing relationships with helpful vendors. Noland and Smith emphasize that they have learned a lot from their experiences in the business—Noland on the retail side, and Smith from his days at Iams.
The personal touch extends to the company’s advertising program. Smith says that Pet Club keeps a database of shoppers, who receive a mail from their favorite store on a regular basis. The company also is very involved with marketing on the Internet. “It is the future and it is already bringing people to our stores,” he adds.
Of course, a fast-growing population in the southwest has not hurt the company’s chances either. Arizona’s population has essentially doubled in size since 1990 to more than 6.4 million people, and most of that growth is coming in the Phoenix and Tucson areas, where most of the chain’s stores are located. (One store is in Kingman, Ariz., about 50 miles south of Las Vegas.)
Colorado has experienced similar growth. The Centennial State experienced a 16-percent increase in population from 2000 to 2010 to more than five million people.
“I think we are in the right place now,” says Noland. “We are in very good marketplaces that are growing and becoming more lucrative for pet retailing. There is an increase in pet ownership as well. But we still have to make sure that we cover all our bases in terms of merchandising and marketing.”
Still, the chain has its eyes set on other states as well. While Noland and Smith would not identify which states they were looking at, both said that the company has an ambitious growth plan ready to roll. First, they expect to be operating as many as 40 Pet Club stores and add several feed units by the end of this year. Then they hope to open about 10 stores a year in up to four new western states beginning in 2013. Both say that a total of 250 stores, scattered throughout the west, is possible by early in the next decade.
“I know this business very well,” says Noland. “It is not hard to find new locations, even in new states. All we do is find a spot that we think is right for our stores and start building. We don’t spend a lot of time thinking about it. We are very confident that we can go in, find the right location and get the business going.”
But what about the big-box pet retailers and mass merchandisers?
“We focus on our business and getting it right,” notes Smith. “We do not worry about the competition, whether big or small. We know how to win. It is through hard work, training and by being open to learning new things all the time. We learn new things everyday, and we will apply that to our business daily if applicable.”
Both also see evolving consumer needs as an opportunity, especially for Pet Club. This trend may serve as a starting point for other independent and small-chain pet retailers in the future.
“Consumers are looking for more from their pet stores now,” says Noland. “They want a better shopping experience, and they want the products that fit their lifestyle and what they want to purchase to feed their pets. I think they will choose us because we offer a personal touch and help them find the items they are looking for. It is a pleasant shopping experience in many, many ways.”